Another myth we’d like to address: Your level of education and your credit score.

Does Your Education Level Affect Your Credit Score?

Short answer: No, your education won’t affect your credit score.

It can, however, affect your creditworthiness, depending on where you borrow money.

Traditional lenders determine your creditworthiness based only on your credit file, which doesn’t include information about your education. Your education — whether you have a high school diploma or a Ph.D. — has no way of bumping your three-digit number (credit score) up or down.

Upstart, however, is a lending platform that partners with banks to offer “smarter loans.” Upstart’s machine learning can incorporate factors like education to understand a borrower more completely.

How Education Can Affect Your Creditworthiness

Although your credit score helps inform lenders of your borrowing power, it’s not the only factor in determining your creditworthiness.

Creditworthiness, as defined by Investopedia, is “a valuation performed by lenders that determines the possibility a borrower may default on his debt obligations. It considers factors such as repayment history and credit score.”

With Upstart, one such factor could be your level of education.

Rather than solely focusing on your FICO score (though it does require a 620 FICO score) and years of credit history like most other lenders, Upstart also assesses your education, area of study, and job history.

The idea is this makes it easier to get a loan because, according to Upstart’s website only 45% of Americans have access to prime credit — even though 83% of Americans have never defaulted on a loan.

“[The banks] all just basically told me I was screwed unless I either filed bankruptcy or filed a hardship payment plan,” Buxton said of her situation, deep in credit card debt. “The reason I think I got the loan [from Upstart] is because of the college I went to.”

Buxton received her bachelor’s in biology from Rensselaer Polytechnic Institute and has several solid years of work experience.

Umm… Are Upstart Loans Legal, Though?

Although this scoring technique has proved to help consumers like Buxton, it’s been somewhat controversial in the industry.

Some contest these artificial-intelligence systems will favor those Ivy League graduates with degrees in high-earning fields — people who already have a leg up.

This, folks have argued, could violate the Equal Credit Opportunity Act, which prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age or public assistance needs.

However, Dave Girouard, co-founder of Upstart, told the International Business Times back in 2015: “Using tools provided by the Consumer Financial Protection Bureau, we closely monitor — and can show — that our model doesn’t discriminate against any borrower on the basis of race, or any prohibited characteristic. To us, fair lending isn’t just regulation — it’s a concept we fundamentally believe in.””

Last September, the CFPB acknowledged what Upstart is doing with a no-action letter.

“The CFPB’s no-action letter signifies that Bureau staff has no present intent to recommend initiation of supervisory or enforcement action against Upstart with respect to the Equal Credit Opportunity Act,” the CFPB stated in a press release.

In fact, Upstart has been paving the way for more lending platforms to assess consumers based on other factors, aside from FICO scores and years of credit.

“… the Bureau continues to explore the use of alternative data to help make credit more accessible and affordable for consumers who are credit invisible or lack sufficient credit history,” the CFPB said in the same press release.

It looks like the future of credit is shifting, and Upstart is paving the way with its motto, “You are more than just your credit score.”

If you’re curious to see if Upstart can help you, get a free quote online (no, it won’t hurt your credit score.) It offers loans of three- and five-year terms ranging from $1,000 to $50,000 and rates start at 7.37% APR.

Keep your eye out to see if this becomes more of a trend.

Carson Kohler (@CarsonKohler) is a staff writer at The Penny Hoarder. She’d love to know what you think about emerging platforms like Upstart.